Treasury

Armed Forces Pension Scheme and Firefighters’ Pension Scheme: Adjustment in respect of 2021 and 2022 revaluation

John Glen: Public service pension schemes (PSPS) are a crucial and valued part of public sector remuneration. One of the valuable features of these defined benefit schemes are provisions to ensure that accrued pensions of active and deferred members are adjusted at a rate set out in statute that is not dependent on investment returns. Depending on the scheme of which they are a member, the accrued pension of an active member of the Career Average Revalued Earnings (CARE) PSPS introduced from 2014 and 2015 is revalued each year by an amount equal to the change in CPI, CPI+X% or Average Weekly Earnings (AWE).The process for this revaluation is set out at section 9 of the Public Service Pensions Act (PSPA) 2013. This legislation specifies that this is achieved through a Treasury Order made in each year for the period, which “may determine the change in prices or earnings in any period by reference to the general level of prices or earnings estimated in such manner as the Treasury consider appropriate”. In practice, accrued pensions of active PSPS members have been revalued in April of each year based on Office for National Statistics (ONS) estimates of the September-to-September increase in CPI for the previous year for most schemes, or based on ONS estimates of the September-to-September increase in AWE for the 2015 Firefighters’ Pension Scheme (FPS) England and its devolved equivalents and the 2015 Armed Forces Pension Scheme (AFPS). ONS practice is to publish each year a provisional AWE figure for the September-to-September increase in November followed by a revised figure in December.During work leading up to the laying of the Treasury Revaluation Order published in April 2023, it was noted that the Treasury Revaluation Orders for 2021 and 2022 specified an AWE figure based on provisional ONS figures, rather than revised ONS figures, which had been used in previous Treasury Revaluation Orders from 2015 to 2020. Although the legislation setting out the revaluation of PSPS does not specify a figure of AWE growth to be used for the purposes of revaluation, it is the Government’s view that the previous practice of using revised ONS estimates should have been maintained in 2021 and 2022. The Government thus intends to correct the position affecting those currently active, deferred and pensioner members who were in active service in one of the affected PSPS at any point between 1 April 2020 and 31 March 2022. This will ensure all members receive the correct amount of pension. For a member who was in active service throughout the entire period, their accrued pension up to 31 March 2022 will be up to around 0.6% larger following this change. This change in pension value will not affect the benefit entitlement of those who were active members of the legacy pension schemes for the armed forces or firefighters during the years in question if they choose legacy design benefits under the upcoming choice exercise to remedy the discrimination identified by the McCloud/Sargeant litigation.The corrected pension benefit amounts for affected PSPS members will be provided through scheme regulations made under section 3(2)(a) of the PSPA 2013. As these regulations will be specific to the affected schemes, they will be consulted on and legislated for by the Home Office and the Ministry of Defence for the 2015 FPS England and the 2015 AFPS respectively. It will be for the Scottish and Welsh Governments to make similar changes to firefighters’ pension schemes in those countries. The FPS in Northern Ireland is fully devolved; therefore, it will be for the relevant authorities there to take forward any similar change for the FPS in Northern Ireland.The revised position and regulation change announced in this statement will only uplift an affected PSPS member’s accrued benefits. The Government intends to consult and legislate to implement these changes as quickly as is feasible.

Department for Education

Academies Financial Oversight

Nick Gibb: Today, my Noble Friend, The Parliamentary Under Secretary of State for the School System and Student Finance (Baroness Barran) has made the following statement. The 2023 Academy Trust Handbook (ATH), published today and applicable from 1 September 2023, will introduce improvements to the financial oversight framework for academy trusts. These improvements will maintain the rigour of the current framework, while achieving a better balance for academy trusts, including: A more streamlined and concise ATH that more clearly describes the framework for Academy Trusts, removing unnecessary detail/prescription, with links to additional guidance for more detailed support where appropriate.A change in the approval requirements for related party transactions (RPTs) means that from 1 September 2023 RPTs between an academy trust and a college/university, or a school which is a sponsor of the academy trust, or with other state funded schools/colleges will be required to be declared only. In addition, the approval threshold is increased from £20,000 to £40,000 and this will only apply to singular transactions of this value or above.A range of other improvements such as cutting out duplication across financial returns; pre-populating collection tools; extending the Budget Forecast Return deadline; clarifying requirements through improved guidance are currently being prepared and delivered over the course of this year. There are then areas for action that will be delivered over a longer timescale, and we will continue to engage the sector in this process. The changes form part of the departmental response to the commitments in the Academies Regulatory and Commissioning Review, published in March this year. The existing framework is robust and thorough with academy trusts – as companies, charities and public sector bodies – subject to high levels of scrutiny. Standards of financial management and governance are high across the sector. In 2020/21, 99.5% of academy trust accounts received unqualified opinions and independent reporting accountants concluded that there were no regularity exceptions in trust financial statements for 92% of trusts. The framework exists to safeguard taxpayers’ money and ensure it is being used for its intended purpose. This supports the department’s ambition to ensure every pupil is receiving an excellent education and that all young people can realise their potential. However, we also want to ensure that the framework is appropriately balanced so that it places proportionate requirements on the sector, as well as enabling the Education and Skills Funding Agency (ESFA) and Department for Education (DfE) to fulfil their responsibilities, including the provision of assurance on its stewardship of public funds to Parliament. In developing these changes, ESFA and DfE have worked closely with a range of representatives of the academy sector. Advisory groups were established, made up of sector experts, representative organisations and academy trusts CEOs and CFOs. The groups provided in-depth feedback on the current ATH requirements. While there was agreement about the core of the financial oversight framework and the key principles that underpin it, we heard that aspects of the current framework are either hard to understand, overly complex or excessively prescriptive. These changes are possible because of the capability of trusts across the academy sector which has matured significantly in recent years. As the sector continues to develop, we can continue this conversation with sector representatives about the financial oversight framework, identifying further opportunities to improve and streamline.

National Colleges

Robert Halfon: Today I have laid before the House, a Departmental Minute giving notice of a contingent liability in respect of Ada National College for Digital Skills.The proposal will be reported as a contingent liability in line with the HM Treasury Contingent Liability Framework and managed in accordance with Managing Public Money (MPM).As the forerunner of the Institutes of Technology, the National College Programme established bespoke institutions to meet the skills gaps identified by employers.Ada, the National College for Digital Skills, has played an essential role in establishing industry support and collaboration to deliver high quality education and build a strong reputation that will be hard to replace.I am pleased to announce that work has commenced to relocate the college to the former Sir Simon Milton UTC building in Westminster. DfE are fully supporting this move and would like to thank the Greater London Authority for the role they have played in ensuring that Ada will thrive and continue to provide quality skills education at all levels.HM Treasury has approved the proposal. A full departmental Minute has been laid in the House of Commons providing more detail on this contingent liability.

Academies Commissioning Guidance

Nick Gibb: Today my Noble Friend, the Parliamentary Under Secretary of State for the School System and Student Finance (Baroness Barran), has made the following statement. Today, 6 July, the Department for Education has published the guidance document, “Commissioning High-Quality Trusts: How the Department for Education’s Regions Group takes decisions about the creation, consolidation and growth of academy trusts”. The guidance will improve the consistency and transparency with which the Department works with the sector. It delivers the commitment made in the Academies Regulatory and Commissioning Review to publish clearer, consolidated commissioning guidance, along with finalised descriptions of trust quality. “Commissioning High-Quality Trusts” sets out how the Department for Education’s Regions Group will take decisions about academy trust creation, consolidation, and growth. The guidance responds directly to calls from the sector, heard through the Academies Regulatory and Commissioning Review, for more transparency about how the department commissions trusts, including the evidence that informs decisions. The approach outlined in the guidance makes clear that the department will prioritise the quality of education offered by trusts, whilst also reflecting the priorities and needs of the local area. The guidance will encourage and support trusts to direct their own self-improvement activity. This supports our objective to grow capacity, capability, and choice across the system so that each school can be matched with the right high-quality trust to support the needs of its pupils and students. The guidance consolidates existing documents relating to commissioning, so trust and school leaders will be able to understand the Department’s strategic approach to commissioning and the key processes more easily.

Foreign, Commonwealth and Development Office

FCDO Services

David Rutley: FCDO Services operates as a trading fund of the Foreign, Commonwealth and Development Office (FCDO). I have set the following performance targets for 2023-2024:An in-year surplus in excess of 0.0% before interest, tax and dividend;Achievement of the return on capital employed (ROCE) of at least 6.5% (weighted average);A productivity ratio of at least 82%, measuring actual billable hours versus available billable hours;An in-year customer satisfaction rating average of at least 82%;An average Civil Service People Survey “Your Say” score for ‘Employee Engagement’ of at least 61%; andAn average Civil Service People Survey “Your Say” score for ‘My Manager’ of at least 65%.FCDO Services will report to Parliament on its success against these targets through its Annual Report and Accounts for 2023-2024.FCDO Services provides a range of integrated, secure services worldwide to the FCDO and other UK Government departments, supporting the delivery of government agendas. Services include protective security, estates and construction, cloud computing, communications and monitoring, logistics, translation and interpreting. This is combined with a portfolio of work supporting the FCDO’s programme of maintenance for their buildings and residence’s worldwide. FCDO Services also manages the UK National Authority for Counter Eavesdropping (UK NACE), helping protect UK assets from physical, electronic and cyber-attack.

Home Office

Safer Streets Fund – Round Five

Suella Braverman: The Government remains committed to preventing and reducing crime and ensuring the public is better protected across all parts of the country; every crime matters, every victim matters and every neighbourhood matters. To that end, the Safer Streets Fund is central to the Government’s mission of levelling up. Everyone in this country should have the security and confidence that comes from a safe street and a safe home. This is why the Government is today announcing an additional £60 million investment in improving public safety through the launch of the fifth round of the Safer Streets Fund, running over the second half of the 2023/24 and the whole of the 2024/25 financial year. Since the launch of the Fund in 2020, this Government has already invested £120 million through four rounds of funding, and an additional £5 million through the Safety of Women at Night Fund, supporting over 292 projects across high-crime areas. Earlier this year we published the formal evaluation of the first round of the Fund, which reflects that the initiative is improving understanding of crime prevention measures and making communities feel safer. We will build on the successes of the previous rounds through Round Five, which will continue to tackle anti-social behaviour (ASB), neighbourhood crime and help to combat violence against women and girls in public places. All 43 Police and Crime Commissioners, and equivalents, across England and Wales will be eligible to receive £1.4m funding for tackling crime and ASB in their local area. Among the range of interventions we will be funding are: CCTV and streetlighting, which deter offenders by making it more difficult to commit crime, public guardianship initiatives, reducing opportunities for potential crime and policing interventions. This additional funding will continue to play a key role in ensuring our streets and communities are safe.